Vikings stadium debt could hamper $850 million target
For DFL Rep. Alice Hausman, next year’s bonding bill is a take-two proposition.
The House Capital Investment Committee chair from St. Paul pushed for an $800 million package of construction projects last year, but watched it fail by five votes the day before session adjourned. She got little help from Republicans along the way. And the Democrats who control the Senate slow-walked a bonding package all session, even trying at one point to pay for a key Capitol restoration bonding project through the tax bill in order to circumvent pressures for a larger bonding bill. Ultimately a $156 million capital investment bill was passed in the session’s waning hours, mainly to fund the Capitol restoration project and a handful of smaller proposals. For Hausman, it was far too small.
Now lawmakers are on track to pass a major bonding bill during the 2014 legislative session, and legislators from both chambers are traveling around the state to review the long wish list of construction projects. The Senate Capital Investment Committee recently embarked on a three-day tour of southern and western Minnesota, stopping in cities such as Mankato, Granite Falls, Willmar and Shakopee. The House Capital Investment Committee has made three regional trips. At the end of this month, they will visit proposal sites in Minneapolis and St. Paul before wrapping up their travels in southwestern and central Minnesota next month.
“I was the one who said that 2013 was not the year for a bonding bill because we had not done our due diligence, we had not traveled around the state yet. Now we are looking at everything,” said Rep. Greg Davids, R-Preston. “Some projects aren’t ready for prime time, and some are, and you can tell pretty quickly when you go out and actually look at these things.”
But as legislators see dilapidated university buildings and review other construction projects in person, some think the $850 million budgeted for bonding projects next year should grow. “I would [like to see a bonding bill reach $850 million], if not larger,” said Rep. Carly Melin, DFL-Hibbing. “It’s too bad that we didn’t do it last session, because interest rates were so low.”
Hausman, too, would like to see a larger bonding bill after her proposal failed last session. By her account, the list of worthy construction projects around the state has only grown since then. “[Legislative leaders] sort of agreed on $850 million,” Hausman said. “I’m hoping it can be more than that.”
A long list
In all, there are $2.8 billion in bonding requests for lawmakers to review, $2.1 billion of which were submitted by state agencies and the rest by local governments.
Repair and preservation projects on university and college campuses — also known as HEAPR — and other construction projects make up the majority of bonding requests. The University of Minnesota is seeking $232 million in bonding dollars for various projects, and the Minnesota State Colleges and Universities (MnSCU) system has come bearing a $286 million wish list. The big ticket items: about $56 million for renovation of the Tate Sciences building at the University of Minnesota; construction of a new science center at Metropolitan State University, costing nearly $36 million; and another $25 million for a new clinical sciences facility at Mankato State University. Both MnSCU and the university also want about $100 million for asset preservation.
Rep. Matt Dean, R-Dellwood, the lead Republican on the House Capital Investment Committee, said maintaining university buildings will be a priority for Republicans. “For me, that is the most important thing — before we build new buildings, we take care of care of the buildings we already have,” Dean said, adding that it can be difficult to convince other legislators of that. “I’ve never been invited to a ribbon cutting for a roof replacement.”
There’s also a big price tag on a slew of projects requested by the state’s Department of Corrections. The most expensive of them — and a priority for Gov. Mark Dayton last session — is $29 million in updates to the St. Cloud prison.
“It’s a must-do project,” said Senate Capital Investment Chair LeRoy Stumpf, who is visiting the facility next week. “It’s the place where they basically unload these prisoners and doctors and nurses and health professionals, and it’s a totally undersized and totally antiquated system.”
On the human services side, state officials are seeking $56 million for improvements to the Minnesota Security Hospital and $7 million for the Minnesota Sex Offender Program (MSOP). But lawmakers are mired in policy problems with MSOP, and Hausman said she’s inclined to focus on the security hospital with the goal of separating the populations at the two facilities.
“That’s a campus where the populations are all mixed up,” Hausman said. “The sex offenders and those in the security hospital are really on the same campus, and the goal of this is to separate the two populations.… With the sex offenders, we’re in such a state of flux in terms of policy I wouldn’t want to build anything until I knew what the committees are going to do relative to policy and what the courts are going to do.”
Stumpf, of Plummer, said there’s also a new trend in bonding requests: Communities are seeking state dollars for projects to make up for federal funding that has simply stopped coming. Two flood wall projects in the state have yet to be completed after federal dollars were cut short, and federal money has likewise been cut off to a project that would create a pipeline to bring water from the Missouri River aquifer to water-starved communities like Windom and Jackson in the southwest corner of the state. In those cities, officials are considering moratoriums on new buildings and businesses because of short water supplies.
“It’s gotten to a heightened level of concern right now,” Stumpf said. “It’s a tough sell to convince my colleagues to pick up the federal share when we’ve already picked up the state share.”
Then there are the regional civic centers, which are always a point of controversy in any bonding bill. Last session, Democrats supported three proposed civic center bonding projects in Mankato, St. Cloud and Rochester, but Republicans — if they didn’t live in those districts — voted against them. Davids, however, says he might be changing his tune on civic center bonding. The three projects are seeking a combined $60 million-plus next session.
“I’m torn on the issue of the civic centers,” he said. “My first inclination is do it yourselves, but as you work the numbers and go through the projections and the spreadsheets, maybe Mankato, St. Cloud and Rochester are legitimate here.”
Vikings stadium complicates bonding bill
Hausman isn’t the only one who’d like to see a bonding bill that tops $850 million next year: Dayton has said he’d like to see a package of construction projects that hits $1 billion. But as the projects pile up, money could turn up short.
Dean says it’s possible that counting bonds for the new Vikings stadium project toward the state’s debt capacity could limit the dollars available for other projects. That’s something he and other Republicans will be watching carefully in upcoming budget forecasts.
“It might be that it’s under $800 million total once we put the cost of the stadium on there,” Dean said. “We will be watching that closely so we don’t go over our debt limit and screw up our bond rating.”
Stumpf is also concerned about the possibility that the Vikings stadium debt will limit the dollars available for next year’s bonding bill.
“We’ve kind of slipped into a trap, a catch-22,” Stumpf said, adding that he plans to sit down with Dayton to talk about the issue. “I think that will be helpful if we wouldn’t have to take capacity away from the state and the important projects — whether they are higher education, or state prisons, or hospitals — just because we built a football stadium that has the revenues to pay off that debt.”
“It seems to me that it’s a little odd that we have to calculate that,” he added. “That’s a challenge we will have to try and work out.”
Staff writer Charley Shaw contributed to this report.